Neo Lithium Corp. announced its progress on the development of its wholly owned Tres Quebradas lithium brine project (“3Q Project”) in Catamarca Province. As the winter season in the southern hemisphere comes to an end, Neo Lithium is pleased to report that the camp, roads, weather station and the pilot evaporation ponds operated as expected throughout the winter season, demonstrating that its operational team and planning activities have been very successful, with no disruption due to seasonal factors.
Preliminary Economic Assessment
The Company previously announced that it had engaged GHD Chile SA, a leading full-service engineering firm with offices throughout Latin America, to complete a preliminary economic assessment (“PEA”) for the 3Q Project. The PEA is expected to be released in October 2017 and will be based on an estimated production rate of 35,000 tonnes of lithium carbonate per year. The PEA will include process flow diagram of major units, process description to define the concentration and purification, equipment list, general arrangement of production ponds, plant block diagram and conceptual report for electrical generation. The study will also include capital and operational expenditures and after-tax cash flow forecasts and cash flow sensitivity to key inputs.
Grant of the Easement Over the Surface Property for Mine Construction
The Company has obtained from the applicable mining authority an order granting an easement over surface lands for mine construction and road access to the mine. Although the Company has rights over the surface property for exploration and development of the project by virtue of the original project acquisition agreement, the granting of a formal easement by the mining authority is an important step towards development of the project.
Permitting – Environmental Impact Assessment
The Company is now focused on baseline studies and has completed the analysis for flora, fauna, limnology and microbiology for the summer, fall and winter. Social and archeology studies have also been completed. Soil, air, landscape and paleontology studies are expected to be completed before the end of the year. These environmental studies are required to support the full environmental impact assessment report that is required, along with an economic study, to obtain a mine construction permit. This environmental impact assessment report is expected to be completed and delivered to the mining authorities in the first half of 2018. This assessment is the final permit before mine construction.
Fall and winter evaporation has been completed at the on-site pilot ponds. The ponds are fed by a solar powered pump that extracts brine from a well in the salar at 35 metres depth. The Company is aiming at a close-to-zero emission target for the extraction process. The system automatically works during the daylight and has proven effective at a pilot scale. On a daily basis, the on-site lab analyses the concentration of critical elements in the brine as evaporation occurs. In general, winter evaporation has been faster than expected. Also, calcium has precipitated as CaCl during the cold weather, further increasing the lithium concentration in the ponds. CaCl is a valuable by-product that is expected to enhance the project’s economics.
The recently announced maiden resource calculation resulted in a Measured and Indicated resource of 714,242 tonnes of lithium carbonate at an average grade of 716 mg/L Lithium and an Inferred resource estimate of 1,339,546 tonnes of lithium carbonate at an average grade of 713 mg/L Lithium, at a conservative 520 mg/L cut-off (the highest in the industry). Results so far include only one season of drilling and pump tests and additional targets remain untested, indicating the possibility of additional resources at the 3Q Project. The average combined impurities for Magnesium/Lithium and Sulphate/Lithium are among the lowest in the industry.